Links to Consider, 11/16

Monday's Zoom session; Jeremy Horpedahl on wealth; Joel Kotkin on Europe; Jennifer Burns on Milton Friedman; Jason Manning on racial conflict a century ago

On Monday, Moses Sternstein and I discussed the state of the economy. We’ve been too pessimistic in the past, but we seem to be ready to double down on pessimism going forward. Video here.

Jeremy Horpedahl writes,

Median home-sale prices soared more than $130,000 between 2019 and 2022, which may not have made you feel wealthier—if you were shopping for a home, you may have felt poorer—but it boosted household balance sheets. Those benefits extended across the income distribution, too, since a slight majority of households in the bottom half of the income distribution own their home.

Home prices weren’t the only thing driving household-wealth growth. Despite its recent volatility, the S&P 500’s 2022 average was 37 percent higher than it was in 2019, meaning household retirement accounts were a lot fatter in 2022, too.

Hence, we are much wealthier than we were a few years ago. But are we, really? The houses are the same houses. The companies are the same companies. What is different is how the market values them.

Joel Kotkin writes,

Europeans are unwilling to preserve their industrial base and control their borders, leaving the continent increasingly weak and largely defenseless. The leaderless American empire may be creaking, but Europe is in worse shape, hemmed in by dismal demographics, high taxes, suffocating regulation, and an entrenched bureaucracy that makes California seem like a libertarian paradise.

He cites climate policy and poorly-assimilated Muslim immigrants as weakening European societies.

Russ Roberts talks with Jennifer Burns, who says,

Friedman was really considered a crank and deeply unfashionable, and sort of the subject of ridicule, because he was doing things like trying to add up bank vault cash and figure out how much money there was in the economy, instead of creating a general equilibrium model that would predict whether we were going to go into recession or not, or how big the multiplier is, or what the budget should be. He just wasn't thinking in those terms at all.

Her new biography of Friedman seems likely to be a must-read.

Jason Manning writes,

Southern blacks were mostly rural, used to virtual serfdom and Jim Crow laws, and culturally distant from both Northern whites and Northern blacks. Some Northern blacks complained that the arrival of the Southern blacks, with their embarrassingly coarse ways, had increased white prejudice against blacks in general. They thought race relations were better before and the Southerners “made it hard for all of us.” One black woman claimed that “her children used to attend ‘the white kids’ parties’ and “the white children and colored children got along fine.”

He is reviewing William M. Tuttle, Jr.’s Race Riot, a book about a conflict that occurred in Chicago in 1919. I think that the migration of blacks from the rural South to the urban North deserves more study. My casual opinion is that it gave blacks better economic opportunities. It did not enable them to escape racism or segregation. And it unmoored them from a culture of family and religion. Reading Malcolm X and Claude Brown, I came away with the impression that drugs and organized crime played a major role in the black experience in Northern cities in the 1940s and 1950s.

substacks referenced above:

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Books: Race Riot